Can these trends be reversed? We believe not. The “hub econ-
omy,” as we will argue, is here to stay. But most companies will
not become hubs, and they will need to respond astutely to the
growing concentration of hub power. Digitizing operating capabil-
ities will not be enough. Digital messaging platforms, for example,
have already dealt a blow to telecom service providers; invest-
ment advisors still face threats from online financial-services
companies. To remain competitive, companies will need to use
their assets and capabilities diff erently, transform their core busi-
nesses, develop new revenue opportunities, and identify areas
that can be defended from encroaching hub fi rms and others rush-
ing in from previously disconnected economic sectors. Some com-
panies have started on this path—Comcast, with its new Xfi nity
platform, is a notable example—but the majority, especially those
in traditional sectors, still need to master the implications of
network competition.
Most importantly, the very same hub fi rms that are transforming
our economy must be part of the solution—and their leaders must
step up. As Mark Zuckerberg articulated in his Harvard commence-
ment address in May 2017, “we have a level of wealth inequality that
hurts everyone.” Business as usual is not a good option. Witness the
public concern about the roles that Facebook and Twitter played
in the recent U.S. presidential election, Google’s challenges with
global regulatory bodies, criticism of Uber’s culture and operating
The Situation
A few digital superpowers, or hub
fi rms, are capturing a dispropor-
tionate and growing share of the
value being created in the global
economy.
The Challenge
This trend threatens to exacer-
bate already dangerous levels of
income inequality, undermine the
economy, and destabilize society.
The Answer
While there are ways for com-
panies that depend on hubs to
defend their positions, the hubs
themselves will have to do more to
share economic value and sustain
stakeholders.Idea in Brief
MANAGING OUR HUB ECONOMY